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The government is finally paying up

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Henry Craver's picture
Small Business Owner Self-employed

As a small business owner, I'm always trying to find ways to cut costs and boost the dependability of my services. To that end, I've become increasingly invested in learning about energy saving...

  • Member since 2018
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  • Aug 12, 2022

As is to be expected, most of the coverage surrounding the recent domestic bill has centered around electric vehicles and regulation affecting big industry. People just love to talk about Tesla and the company's founder, it seems. The bill, however, is also a boon for energy efficiency in America. For the sake of simplicity and saving my own time, I've just included the EE run down given in this article at CNN:

Help installing more efficient air conditioning and heating equipment: The bill would provide Americans with tax credits to cover 30% of the costs of installing highly efficient ACs, water heaters, furnaces and other cooling and heating equipment. 

Households would be able to receive up to $600 for each piece of equipment, up to $1,200 total per year. There would also be a special credit of up to $2,000 for electric heat pumps. And credits could be used to upgrade breaker boxes, if needed, to handle additional electric load. 

This measure replaces a similar tax credit that expired at the end of last year and came with a lifetime cap of $500. 

Aid for low- and moderate-income Americans to purchase electric appliances: The legislation calls for providing low- and moderate-income households with rebates of up to $14,000 to buy electric appliances. 

The rebates could cover between half and all the typical $14,000 cost of installing an electric heat pump, as well as much of the cost of electric water heaters, stoves and ovens and clothes dryers, as well as upgrading the home’s breaker boxes and electric wiring. The legislation sets aside $4.5 billion over 10 years for this provision. 

To alleviate concerns that low-income households would have to pay for the items up front, rebates could be provided at the point of sale or contractors could claim them, for example. It would depend on how state energy offices, which would administer the rebates, would set up their programs.

Boosting efficiency in HUD housing: The bill would provide $1 billion in grants and loans to affordable housing units administered by the Department of Housing and Urban Development to increase energy or water efficiency, improve indoor air quality, make clean energy or electrification upgrades or address climate resilience needs. The improvements could include insulation, HVAC upgrades, flood-proofing, storm resistance, water-saving changes and the installation of solar or other renewable energy systems

Tax credits to reduce energy leakage: Americans could receive tax credits to cover 30% of the costs of home improvements that reduce energy leakage, such as updated windows, doors, insulation and other weatherization measures, under the bill. They could get a credit of up to $600 per improvement and a total of $1,200 per year. Plus, they could receive a $150 credit to have a home energy audit conducted. The credit would be expanded so families could use it multiple times to make upgrades over time.

Rebates for retrofitting homes: Households could receive rebates of up to $4,000 to install energy-saving measures throughout their homes, under the bill. Low- and moderate-income Americans could receive up to $8,000. The rebate amount would depend on the estimated savings that would be achieved. The legislation would provide a total of $4.3 billion in funding over 10 years.

Energy efficiency, at least in my eyes, is not nearly as exciting as silver bullet solutions like renewable energy or advanced nuclear that require behavioral changes of consumers. However, those silver bullets simply are not coming to save the day anytime soon. These energy efficiency products and measures are proven to work ... it's really low hanging fruit when you think about it. The government is finally throwing money at the problem in a situation where that actually seems likely to work. It's about time. 

Of course, just because rebates exist doesn't mean people will take advantage of them in mass. The programs might be great, but they'll be nothing without good PR and ad campaigns to make sure people take advantage of them. Only time will tell how it all plays out. 

Matt Chester's picture
Matt Chester on Aug 12, 2022

Of course, just because rebates exist doesn't mean people will take advantage of them in mass. 

This is so obvious, and yet so readily overlooked. Education and evaluating how to best move people to take advantage is half the battle. 

Henry Craver's picture
Thank Henry for the Post!
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